CBSL keeps Overnight Policy Rate unchanged

THE Monetary Policy Board at its meeting held on Tuesday decided to maintain the Overnight Policy Rate (OPR) at the current level of 7.75%.

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The Board arrived at this decision after carefully considering evolving developments and the outlook on the domestic front and global uncertainties.

The Board is of the view that the current monetary policy stance will support steering inflation towards the target of 5%, the Central Bank of Sri Lanka (CBSL) said yesterday.

Inflation measured by the Colombo Consumer Price Index (CCPI) remained unchanged at 2.1% in December 2025. However, food prices edged higher in December compared to November. This was due to supply chain disruptions caused by Cyclone Ditwah and higher demand for food during the festive season. Inflation is projected to accelerate gradually and move towards the target of 5% by the second half of 2026.

Core inflation, which excludes price changes in volatile food, energy, and transport from the CCPI basket, has also shown some acceleration in recent months. Going forward, core inflation is expected to accelerate further as demand in the economy strengthens. Meanwhile, inflation expectations appear to be well anchored around the inflation target.